Meta Unveils New Non-Voting Stock Class to Fund AI Expansion

Meta is establishing a new class of non-voting capital stock to finance its aggressive expansion into artificial intelligence. The company confirmed the move during its third-quarter earnings call on Wednesday, detailing a strategy designed to secure additional funding while maintaining its current governance structure. This new stock tier will be issued as a dividend to all existing shareholders, providing Meta with a new avenue for raising capital to support its AI-driven objectives.

Chief Financial Officer Susan Li outlined the mechanics of the new shares, stating the company plans to “create a new class of non-voting capital stock, which will be distributed to all existing shareholders through a stock dividend.” Li emphasized that this new category is intended for public trading and can be utilized for capital raising, employee compensation, and acquisitions. Importantly, the introduction of these shares allows the company to expand its financial flexibility without altering the voting power held by current Class A and Class B shareholders, preserving the firm’s “founder-led structure.”

The financial context for this move comes as Meta reports robust third-quarter earnings that exceeded Wall Street expectations. The company generated $64 billion in revenue, a 26% increase from the previous year. However, the push into new technologies has driven costs upward, with expenses rising 68% year-over-year. Additionally, the Reality Labs division, responsible for AR glasses and VR hardware, continues to operate at a loss, though the company projects these losses will decrease to between $18 billion and $19 billion for the year.

The new capital structure is directly linked to the company’s recent product launches, specifically the “Muse” suite of AI tools. Over the past year, Meta has released models such as Muse Spark, Muse Glimmer, and Muse Wonder, alongside coding agents like Muse Code. The company also announced new avatar designs for its AI assistant, Meta Muse, during the recent Meta Connect event.

Early adoption metrics for these AI tools appear strong. CEO Mark Zuckerberg reported that over 10 million people in the U.S. and Canada have set up Muse personal agents within the last month and a half. He noted that the app has ranked number one in the App Store almost daily during that period, asserting that the product has achieved “clear product-market fit” and that the company is now entering a phase focused on scaling the service.

Despite the growth, Meta faces ongoing external pressures. Susan Li noted that the company continues to monitor active legal and regulatory matters that could significantly impact financial results. Specifically, the company faces scrutiny regarding youth-related issues in several markets, with a number of trials regarding these matters scheduled in the United States over the coming months.